15 Things to Remember When Hiring an Energy-Saving Consultant

Published on Friday, 29 August 2014 09:57:52
Written by Marc

As real estate portfolio managers, we often have to deal with external consultants to come in and help us find ideas to save energy, evaluate the potential savings, and then help us again track our progress. The main problem is that energy consultants have other clients, so getting their full commitment is sometimes a challenge. You can setup a meeting with a consultant, only to have them either cancel the meeting because they need to tend to another client, or have them promise to give you the final report by such a date, only ask for a delay later on. In addition, once the final report is presented, getting them to modify it quickly is another problem because that time is not slotted in their agenda. At the end of the day, you could end up constantly waiting for them.

Also, most of the energy consultants have a few specialties or preferences in terms of energy-saving ideas, so they keep suggesting energy-saving measures that they are more comfortable with estimating, not necessary those which are the best for our properties. This is normal because very few firms are large ones, so they naturally tend to develop specialties over time.

Finally, as they tend to work with different suppliers of energy-saving products, they also tend to develop better relations with some suppliers than others and over time they can come to recommend more a particular type of product, which is not necessarily the best product needed for our buildings. They might not even do this on purpose; it is simply something that naturally happens over time.

As a building owners or managers, we constantly experience this. In addition, most of the time we find ourselves running to find information to feed to our consultants. It starts with gathering the utility invoices, then the buildings information (such as drawings, equipment installed, schedules of operations, and other pieces of information that the consultant will require). In parallel to this, there are the visits where we show our consultant the property so he or she can get familiar. If it feels like giving, a guided tour it is because that is exactly what it is, because unless the consultant is very familiar with the building, he or she will most likely need to come and visit it to understand how the building works. At the end of the day, the only work we do not perform is finding the potential savings and estimating them, all the rest of the work is practically done by us already. However, calculating the energy-savings has historically been the most difficult part because it requires a solid understanding of engineering and specific items such as load calculations.

To make matters even worse, once we do get a final report from our consultant, it is normally either in a printed form or in a PDF (or both), which is almost impossible to edit. Few consultants will freely accept to handout the original documents in editable forms, so the vast majority of the time, the reports that we pay for are static. In a few months (or sometimes weeks), the reports will no longer be valid because something will have changed in the building and the calculations will need to be redone.

As a building manager, I often found myself going back to our energy consultants to ask for changes in their reports, trying to keep the reports up to date on a regular basis. One of the problem is that we rarely manage to get all proposed measures approved internally in one single project, so there is often a delay between the time the report is assembled and the time we manage to get all the ideas approved, funded, and completed. As most building managers know, if we get a portion of the proposed energy-saving measures approved, then we know that we need to go back to the consultant’s report and have it updated so that we can try to get the other measures approved later. Doing this requires getting our consultant back to the building, providing him or her with new information on what was completed. Then, we have to wait for him or her to redo the calculations, estimates, and waiting a few weeks to get a revised report.

Tips for Working with Consultants

I realized over the years that much of the pain working with consultants was the lack of planning. Like many agreements in business, when things are set straight from the start, life is a little easier. Here are some items to look for before signing any agreement with an energy consultant:

First, define the mandate in detail. This may seem trivial, but I have seen so many agreements that lack half of the important elements. At a minimum, the agreement with your consultant should include a detailed description of what the consultant will do and give you in terms of final report. Here are 15 things to remember when dealing with your consultant:

1. The final report must contain detailed energy-saving estimates. This is the estimated monthly and annual savings of each proposed energy-saving measure. Ask your consultant to include not only the estimated energy savings but also the estimate maintenance saving (or additional cost) of each proposed measure. In addition, make sure that the estimated energy-saving section indicates what the crossed effects are. A cross effect occurs when an energy-saving measure influences another one.

For example, replacing lighting in a building will also reduce the generated heat, which could reduce the cost of cooling in the summer, but could also increase the cost of heating in the winter. Since these can have a significant influence on the final payback of an energy-saving measure, they need to be included in the report.

2. Get the detailed description of each proposed measures. This should give enough information to be able to go tender with engineering or contractors to do the proposed measures.

3. Estimated cost and payback of each individual proposed measure should be clearly indicated in the final report.

4. The consultant should provide you with estimations of how much grants each energy-saving measure could get.

5. Information on the entity that can provide grants (government/utility provider/other) and when these grants expire (timeline).

6. Make sure that the final report includes not only a conclusion and a list of recommendations, but also information as to the possibility of doing the proposed energy-saving measures in phases. That way if you cannot get the funds approved internally to complete all the proposed measures, you might want to consider breaking the list of proposed measures into phases and do them over some time. Inform your consultant of this possibility before he or she assembles the final report, so that you get detailed information as to what can be done in phases. This section of the report needs to include information on the crossed effects for each group of energy saving measure (each phase).

7. Get to know how many visits the consultant includes in the agreement. It may seem like a detail but I have seen consultants ask for a fee for a second visit because the building owner could not have access to some areas, like the roof at the time of the visit. Discuss about the details of the visit before your consultant comes to the site, as to what he or she needs to see and plan to have proper resources (with access keys to all places needed) for the visit. The number of site visits is normally at the discretion of the consultant, but you do not want to find yourself paying for extra visits.

8. Know what format the final report will be. Is it editable or a static printed/pdf copy? Few consultants will give an editable document, but it never hurts to try to ask. Have a document that is editable can be practical if you want to select portions for various presentations.

9. How many revisions are included in the agreement and how do you define a revision (errors in the report are not revisions, they are to be corrected by the consultant at no cost).

10. List, in detail, the information that is required on your side. Utility invoices and building information are a given, but does the consultant need you to give detailed items like nameplates of each HVAC equipment in the building? It might be better to know in advance what is needed and plan for internal resources to help you.

11. What is the timeline to get the final report? There should be a date at which the consultant has to give you the report. One of the problems in establishing a date is that in many cases, the consultant will need information on your side, so the longer it takes you to provide the information, the longer the overall process will take. Few consultants will accept to lock in a date if they do not know how long it will take you to gather and send them the information. What you can do is agree on how many business days will be needed after you have provided all the information that is listed in the agreement. That way you can determine when the clock actually starts ticking.

12. Considering the chances that you will want to implement, and some of the energy-saving measures that are recommended, let your consultant know that you might be hiring a different consultant for the implementation of the measures. While many consultants will tell you that using them for both the initial study or audit and the implementation will be better and cost effective, there are reasons you might want to shop around for the implementations.

First, the implementation are where the consultants make more money (unless they are very minor implementation), because they often require engineering drawings, project management, and other services. Your initial study might cost $15,000 dollars, but the projects that are recommended in the report might cost $3 million dollars. If the consultant, that is putting together the report, knows that he or she will be getting the mandate to do the project work or at least the engineering work, chances are that the estimated costs in the report could be higher. Getting price comparisons for doing energy saving-projects just makes good business sense.

13. Make sure that the report includes information on the lifespan of the equipment proposed in the measures. For example, if a measure proposes the replacement of a HVAC equipment and carries a payback of six years, if the proposed equipment is only good for five years, you will not be better off. Agree with your consultant what are your preferences in terms of lifespan of equipment and have this information added for each proposed equipment. That way when you analyses the paybacks of each proposed energy-saving measures you can compare that information with the proposed lifespan of the equipment and decide it the measure makes sense.

14. Ask your consultant to include a description of your building systems in place, along with diagrams of the systems if possible. This will be good information to have, both for you and for engineers and contractors when you decide to implement some of the proposed energy saving measures. This information should also include some comments on the present state of the equipment. Again, this is valid information that the consultant will get when he visits your building and prepares the report. However, knowing the state of the equipment can help identify the equipment that you will need to replace in a near future and the equipment that you can wait a number of years before thinking about replacing.

15. Finally, ask your consultant to calculate the carbon footprint reduction for each of the proposed measure. This information can be used for a number of things (marketing tool, helping the environment, meeting environmental code, etc.).